01/26/2026 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB243 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 243 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 26, 2026
3:17 p.m.
DRAFT
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Carolyn Hall, Co-Chair
Representative Ashley Carrick
Representative Robyn Niayuq Frier
Representative Dan Saddler
Representative Julie Coulombe
Representative David Nelson
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Andrew Gray
Representative Jeremy Bynum
COMMITTEE CALENDAR
PRESENTATION: THE RISING COST OF HEALTH CARE
- HEARD
HOUSE BILL NO. 243
"An Act relating to the powers and duties of the Board of
Barbers and Hairdressers and the Department of Commerce,
Community, and Economic Development; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 243
SHORT TITLE: BARBER, HAIRDRESSER, ESTHETICS LICENSING
SPONSOR(s): REPRESENTATIVE(s) CARRICK BY REQUEST
01/20/26 (H) PREFILE RELEASED 1/9/26
01/20/26 (H) READ THE FIRST TIME - REFERRALS
01/20/26 (H) L&C
01/26/26 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
JARED KOSIN, CEO
Alaska Hospital and Healthcare Association
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony discussing the
expiration of advanced premium tax credits.
HEATHER CARPENTER, Director
Division of Insurance
Alaska Department of Commerce, Community, and Economic
Development
Juneau, Alaska
POSITION STATEMENT: Gave a presentation regarding the rising
cost of healthcare in Alaska.
SHAYLA TEAGUE, Insurance Broker
Ark Insurance Solutions
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony regarding the rising
cost of healthcare in Alaska.
LAURA BUTCHER, Owner
C&L Creative
Anchorage, Alaska
POSITION STATEMENT: Testified about health insurance costs
during the presentation on the rising cost of healthcare.
MARK ROBOKOFF, Owner
AK Bark
Anchorage, Alaska
POSITION STATEMENT: Gave testimony during the presentation on
the rising cost of healthcare.
JANIS FLEISCHMAN, Owner
Fire Island Rustic Bakeshop
Anchorage, Alaska
POSITION STATEMENT: Gave testimony during the presentation on
the rising cost of healthcare.
REPRESENTATIVE ASHLEY CARRICK
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 243.
KEVIN MCKINLEY, Chair
Board of Barbers and Hairdressers
Juneau, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB
243.
SYLVAN ROBB, Director
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community, and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions pertaining to HB 243.
ACTION NARRATIVE
3:17:41 PM
CO-CHAIR FIELDS called the House Labor and Commerce Standing
Committee meeting to order at 3:17 p.m. Representatives Nelson,
Saddler, Frier, Carrick, Fields, and Hall were present at the
call to order. Representative Coulombe arrived as the meeting
was in progress.
Presentation: The Rising Cost of Healthcare
3:18:30 PM
CO-CHAIR FIELDS announced that the first order of business would
be the Rising Cost of Healthcare presentation.
3:18:45 PM
JARED KOSIN, CEO, Alaska Hospital and Healthcare Association,
began invited testimony by describing what advanced premium tax
credits were. He remarked that these were essentially a subsidy
that has been created for people in poverty, according to the
federal poverty level, who need to buy insurance coverage on the
Affordable Care Act (ACA) Exchange. He said this tax credit was
set up to create a subsidy so that people can afford coverage
depending on their poverty status. In 2021 and 2022, those
credits were enhanced, or increased, and this enhancement is a
major piece of the discussion since the enhancements ended due
to inaction from the United States (U.S.) Congress.
MR. KOSIN wanted to recognize that both U.S. Senator Sullivan
and U.S. Senator Murkowski voted to extend the enhancements and
understood what the negative implications associated with
expiration for the State of Alaska (SOA).
MR. KOSIN proceeded to explain the implications associated with
the expiration of the enhancements. He noted that the Alaska
Division of Insurance did a fantastic paper in March 2025 that
was presented to the legislature. The paper demonstrated that
around 27,000 or 28,000 Alaskans get some type of subsidy to buy
healthcare coverage. He said that looking at the enhancement or
increased credits compared to the original credits; there was
about $43 million. He said that in other words, when those
enhancements expired, Alaska lost $43 million in subsidy
support.
3:21:50 PM
CO-CHAIR FIELDS noted that questions could be held till the end
of the presentation.
3:22:00 PM
MR. KOSIN said that when looking at the $43 million at a
consumer level, for the 27,000 to 28,000 thousand people who use
these subsidies, it would translate to a "doubling and tripling"
of insurance premiums. He said that when there is a doubling or
tripling or insurance premiums, people are being put into a
position to whether health insurance can be afforded any longer.
He said that the primary concern with the Alaska Hospital and
Healthcare Association is that from a systems standpoint there
are people who will not take coverage. He said that it would
affect multiple stakeholders in healthcare. He said that when
people do not have coverage, they still need healthcare and will
ultimately get it, but the cost is completely uncompensated.
When uncompensated care goes up, providers are put in a position
to do one or two things. The first is having to shift costs
onto someone who can compensate them, he noted that private
insurance holders could pay more to accommodate uncompensated
services. The second option is cutting services. He noted that
this often happens when a provider with a diverse set of
services is required to cut certain services given the inability
to absorb costs. He said that taking this level deeper and
talking about people who forgo care, inevitably they may get
sick. The problem with this is eventually someone will get too
sick to avoid healthcare access and by the time they need
services they go directly to the emergency department. By the
time they reach emergency clinical services, the uncovered
individual would be a lot sicker than they were before. He said
more resources would be dedicated to a patient since they were
in a sicker and more frail state. He said that a second thing
that would happen is that someone would need healthcare, but
would be unable to get access anywhere, and therefore would go
to the hospital emergency room which is legally required to see
patients.
3:26:22 PM
MR. KOSIN remarked that it was currently a "horrible" flu
season. He said there is a higher volume of flu and much more
severe than in past years. He talked about people needing
health care and going to the emergency room. He said clinics
get in a position that they need to divert resources. He said
that wrapping up, the concerns are that tens of thousands of
people will be in this position. He said that the potential for
problems is there and there was no wiggle room to deal with
them. He said that people using emergency services as primary
care providers were challenging when serving people with the
flu. He concluded that the cost of healthcare is too high,
there are high labor costs, high supply costs, worker shortages,
and other components. He said that when someone wants to bend
the cost of healthcare, access needs to be increased. He said
that the more access people are provided with, the more
efficiently they can access the system. He noted that primary
care and urgent care can catch things before they develop into
more serious ailments. He reiterated that lack of access would
drive up healthcare costs. In closing, he said that the Alaska
Hospital and Healthcare Association was very concerned regarding
the changes in insurance coverage.
3:29:36 PM
REPRESENTATIVE SADDLER said that most of the presentation was on
the rising cost of healthcare insurance. He noted the
Affordable Care Act was created to make healthcare affordable,
but it was not sufficient, so subsidies were made. He said that
he had not heard any discussion about how to reduce the cost of
healthcare, but rather just decreasing the cost of healthcare
insurance. He asked if this was a fair statement.
MR. KOSIN responded that this was a good question. He said in
the healthcare system both healthcare costs and health insurance
are interrelated, and one drives another. He said that the
COVID-19 pandemic and inflation were components that may have
produced enhanced credits. He reiterated that healthcare costs
are driven down by people with access to healthcare. He
reiterated issues associated with delayed access to care.
REPRESENTATIVE SADDLER said that he really does not see an end
to the process. If healthcare is expensive and healthcare
coverage needs to get enhanced more, these problems will
continue. He asked what could be done to address the cost of
healthcare itself, other than subsidizing insurance.
MR. KOSIN responded that he was not saying that the answer was
free healthcare for everybody. He acknowledged that this is the
type of situation that requires an investment up front and it
would take years to pay itself back. He said that in Alaska
there are a lot of services that do not exist, primary care is
hard to access. He said that if these access points could be
supported then it would be better. He said that if appropriate
infrastructure and labor investment were made, it would support
healthcare costs. He noted that it was a multi-faceted issue.
3:33:37 PM
REPRESENTATIVE CARRICK remarked that she recently had a
constituent die who did not have coverage to address the flu.
She asked that of the 27,000-28,000 Alaskans who will have
subsidies end, whether Mr. Kosin knew what "buckets" they would
fall into.
MR. KOSIN responded that he thinks it would be broken out, he
said that the Alaska Division of Insurance would be able to
comment on this. He noted that he just left a meeting and was
told by an individual that their daughter had just lost their
subsidies. He said that the enhancements had subsidized a
considerable portion of her insurance. He said that in this
case, the insurance premiums had tripled. He reiterated that
the Alaska Division of Insurance could elaborate on what tiers
people would fall into.
3:36:20 PM
HEATHER CARPENTER, Director, Division of Insurance, Alaska
Department of Commerce, Community, and Economic Development,
gave a PowerPoint presentation [hard copy included in the
committee packet], regarding the rising cost of healthcare in
Alaska. She noted that this was a refresher on a presentation
given to the legislature the previous Spring. She noted that
when talking about health coverage in Alaska, it is important to
discuss what the division is regulating and covering. She said
that the Division of Insurance is a smaller piece of the pie
with 15 percent of the market. When looking at insurance bills
and the Title 21 Statute, it impacts the individual market,
small groups, and large groups.
MS. CARPENTER said that when speaking about the individual
market, Alaska is on the federally facilitated exchange that is
run by Centers for Medicare & Medicaid Services (CMS). She said
that some states have state-based exchanges, but Alaska did not.
She said that the initial enrollment released by CMS for 2026
did not include consumers who paid their first month's premium,
or the effectuation of the policy. She said that hopefully this
information would be available in the next few months.
MS. CARPENTER said that overall rates have decreased on average
for the calendar year. She said that an important note is that
the Alaska Reinsurance Program (ARP) has lowered rates by 40
percent and it does continue to bring stability to the market.
She noted that as Mr. Kosin has shared, many consumers are now
paying more since Congress did not extend Enhanced Premium Tax
Credits (EPTCs).
MS. CARPENTER transitioned to slide 4, which illustrates
information released from CMS. She noted that there were 25,493
individuals who signed up during open enrollment for 2026
coverage. She reiterated that this does not reflect the people
who have paid the first month premium. She said that when
looking at 2025, there were 26,732 people who paid their
coverage and effectively implemented their policy. She said
that this equaled a rate of around 93 percent for an effectuated
rate.
3:39:03 PM
MS. CARPENTER transitioned to slide 5 of the presentation, which
illustrates rates of insurance over the years. She said that
2014 was the first year of the Affordable Care Act that brought
new rates onto the market. She pointed out rate increases over
the course of the years since that time. She noted that one
chart illustrated rates pertaining to Premera and Moda Health,
who are two insurers in the individual market. She pointed out
high increases in 2015 and 2016 that led to legislative action
about waiver policies. She said that 2017 was the first year of
the Alaska reinsurance program with state funding. Then 2018
was the first year of federal pass-through fundings that had a
decrease. She said that there is a slight decrease in rates for
2026, but this comes after three recent years of rate increases
which are being felt more after the expiration of the enhanced
premium tax credits.
3:40:13 PM
MS. CARPENTER transitioned to slide 6, which details the
reinsurance program. She said that the Affordable Care Act
allows states to apply for a section 1332 state innovation
waiver. She noted that former director Lori Wing-Heier had
previously proposed that the Division of Insurance apply for one
of the waivers to fund a state-based reinsurance program that
would help stabilize the market. She explained that in 2016,
the Alaska State Legislature passed House Bill 374, which
enabled the Division of Insurance to apply for the waiver with
the Federal Government. The Division of Insurance would apply
for this type of program through the U.S. Department of Health
and Human Services through CMS and the U.S. Department of
Treasury. She reiterated that this was with reference to ARP.
She said that in the first year, the legislature funded $55
million of appropriation under the condition that the Division
of Insurance would continue seeking the waiver and federal
funding.
MS. CARPENTER transitioned to slide 7 and explained that ARP is
a condition-based reinsurance program. That means that there
are 35 high-risk and high-cost conditions, and if someone has
one of these conditions, their costs are ceded to the program.
She said an example would be someone with Hepatitis C and if
they got an ear infection and go to urgent care, all claims
related to this, or their Hepatitis C treatment would not be
paid by the Premera or Moda Health but would be ceded to the
Alaska reinsurance program. She said that this helps bring
stability since it takes out the high cost from these types of
individuals being on the market. She said that the Affordable
Care Act provides individual market consumers with subsidies
known as advance premium tax credits (APTCs). These tax credits
are based on income. The 1332 waiver application proposes that
the government would fund the reinsurance program by awarding
the difference between the original tax credits and the lower
tax credits thanks to the waiver.
3:42:31 PM
MS. CARPENTER transitioned to slide 8 of the presentation. She
noted that the Division of Insurance was awarded the waiver in
2017 and it was the first state-based reinsurance waiver in the
nation. The waiver was extended for an additional five years at
the end of 2022. She said that through calendar year 2025, the
waiver has brought over $800 million back to Alaska in the
reinsurance program. She reiterated that it would lower the
individual market rates by 40 percent annually. The current
waiver expires at the end of calendar year 2027 and the Division
of Insurance will begin preparations to reapply at the end of
2026.
3:43:13 PM
MS. CARPENTER transitioned to slide 9, which illustrated funding
dynamics and how the federal government determines what savings
look like. She said that each year the division submits rates
with and without the waiver to CMS and the U.S. Department of
the Treasury. She said that both CMS and the U.S. Department of
Treasury take this information and come up with a calculation
that projects what APTCs would cost the federal government with
and without the waiver. After which, they would determine what
the projected savings would be, and the Division of Insurance
would be awarded a portion of these savings as pass-through
funding.
MS. CARPENTER pointed out a chart summary that showed the
projections and how it was associated with the waiver. She
noted that the third column is the actual program amount set by
the division. This would be the amount that insurers can submit
to the program. She said that every year Premera and Moda
Health have exceeded the program amount in claims. She
reiterated that the 35 high-risk conditions tied into this.
MS. CARPENTER said that the next column is the federal pass-
through funding awarded by the treasury. She noted that it
could be observed that from '21, '22, and '23, there were some
large awards that exceeded the program amount. She said that
this was a bit of a fluke in the CMS and U.S. Treasury formula
that benefitted the state. Since the formula has changed,
Alaska has no longer received pass-through funding that exceeds
the program amount. She noted that the state contributions in
2017 were only general funds; the other years have been from the
ceded premium account and the excess pass-through funds. She
explained that the Division of Insurance needs to set the
program amount before knowing what pass-through funding will be.
The insurers need to submit rates in June of each year, and
negotiations occur with them, and CMS reviews the rates as well.
She said that she will not know 2026 federal funding until
March, April, or even May. It is unknown when this information
will be released.
3:46:25 PM
MS. CARPENTER moved to slide 11, which describes the ceded
premium account. She said that insurers that are participating
in the market are required to cede consumer premiums, pharmacy
rebates, federal high-risk payments are ceded, and it is held by
the Alaska Comprehensive Health Insurance Association (ACHIA).
They use some of these funds to pay for administrative expenses
to avoid division funding. She said that the legislature also
had appropriated $10 million in 2024 and 2025. This was used
for Medicaid programs, including a Medicaid rate study. For
calendar year 2026 and 2027, she anticipated that the federal
pass-through funding would not meet the program amount. She
said that the Division of Insurance plans to use ceded premium
to make up the difference. She said that current estimates
place the difference at around $85 million.
MS. CARPENTER moved to slide 12, which highlighted Advanced
Premium Tax Credits. She noted that Mr. Kosin gave a good
introduction to these. She explained that with the Affordable
Care Act a contribution to a premium from consumers is based on
household income and size. The amount received is from a
technical formula and it is between the second-lowest cost
silver plan and the consumers contribution amount; this would be
the subsidy. She echoed Mr. Kosin that during the COVID-19
pandemic in 2021, the American Rescue Plan increased the
contribution and the enhanced premium tax credits were put in
place. She said that those tax credits were extended through
the Inflation Reduction Act, but the credits expired in December
2025.
MS. CARPENTER moved to slide 13 and discussed examples of
consumer costs associated with tax credit expiration. She said
that slides 13 and 14 give examples based on the updated 2026
rates. She noted that the committee was provided with three
different federal poverty levels to exemplify consumer costs
[included in committee file]. She said that 401 percent was
included as one of the examples. Because over 401 percent,
there would be no additional tax credits someone would qualify
for. On slide 14, she illustrated what a consumer cost example
would look like for a family of four.
MS. CARPENTER explained that the Division of Insurance provided
a white paper to the committee [included in committee file]
regarding how these cost dynamics work. It also explains who
falls into what "bucket" and helped address a previous question
from Representative Carrick.
3:50:23 PM
REPRESENTATIVE SADDLER said that a lot of technical information
was provided during the presentation. He said that following
small business testimonies, it may be more difficult to ask
questions. He asked whether it was possible to ask questions.
CO-CHAIR FIELDS said that he would allow some questions
regarding the presentation but wanted to respect small business
testimonies.
3:50:43 PM
REPRESENTATIVE SADDLER said that a lot of money flowed back and
forth and asked Ms. Carpenter whether the Alaska Reinsurance
Program was accepting money from the federal government to
support insurance costs for Alaskans. He asked what the general
money flow was.
MS. CARPENTER responded that this was a correct assumption and
much like it is with the Medicaid Program when applying for a
waiver. The Division of Insurance on behalf of Alaskans applies
to the federal government to pull federal money to add money
back to Alaska and reduce rates on the individual market. She
said that the reason the Federal Government is willing to do
this is because it can save them some money.
REPRESENTATIVE SADDLER asked that given the cumulative between
2017 and 2025 at $803 million, what the annual average might be.
MS. CARPENTER responded that she moved the presentation back to
slide 10 and the fourth column had the annual pass-through
awards.
REPRESENTATIVE SADDLER said that it appears that it would be
around $60 to $120 million a year and asked whether this was a
correct assumption.
MS. CARPENTER said that this was correct.
REPRESENTATIVE SADDLER asked about administrative expenses.
MS. CARPENTER responded that if the ceded premium was used for
another purpose that would bring a question back regarding how
the program would be funded. She discussed how the Division of
Insurance funds various things and noted that the division's
administrative expenses were not a lot but there would be a
higher contribution payment moving forward.
3:53:46 PM
SHAYLA TEAGUE, Insurance Broker, Ark Insurance Solutions, gave
invited testimony regarding the rising cost of healthcare in
Alaska. She noted that she has worked in the individual and
family market since 2019. She said that at one point she
assisted approximately 10 percent of Alaska's marketplace
enrollments. Currently, she sits on a committee with CMS to
provide feedback on how the marketplace functions in Alaska.
She said that she would like to share what the expiration of the
tax credits means in real, practical terms for Alaskans.
MS. TEAGUE remarked that many people were surprised to learn
about enhanced tax credits. Small business owners and self-
employed individuals often assume that health insurance is
simply unaffordable for them. She said that she has worked with
many people who had gone years without health coverage and were
relieved to get access to affordable health insurance. She also
has worked with individuals who had been harmed by the subsidy
cliff at 400 percent. In the past, these were typically
individuals who were self-employed with unpredictable incomes
who estimate income but later found out they exceeded the
threshold and owe the Internal Revenue Service (IRS) several
thousand dollars.
MS. TEAGUE said that the enhanced tax credits and the
elimination of the cliff provided something incredibly
important: peace of mind. The credits made coverage
affordable, reduced the number of uninsured Alaskans, and
stabilized enrollment for households with variable incomes.
MS. TEAGUE explained that the most recent marketplace open
enrollment was the most difficult of her career. Many clients
were in shock, and some were even in tears. Enrollment
conversations that typically take 30 minutes, now take two or
three hours. She said that many clients delayed making a final
decision until the last possible moment, hoping the enhanced tax
credits would be extended or that another solution would be
announced. Clients were aghast that they were expected to pay
two or three times as much as prior years.
MS. TEAGUE noted that she saw "significant confusion" among
consumers due to widespread headlines about tax credits
expiring. Many people believed that all financial assistance
was ending, which caused some people to disengage from the
enrollment process despite qualifying for some level of support.
She said that she works with a married couple in their late 50s
with an annual household income of around $115,000, since the
income level broaches 400 percent of the federal poverty level
for a family of two, they would lose their eligibility for tax
credits. Their monthly premium would increase from $600 a month
in 2025 to around $3,300 a month in 2026. She noted that this
would not be a "platinum" insurance plan but the least expensive
plan available. She said that this couple's situation was not
unique, and she saw premium hikes such as this "time and time
again."
MS. TEAGUE said that due to unaffordable premiums, many
individuals would now go uninsured. She said that there was
about an 11 percent decrease in marketplace enrollments for the
year. She explained that this increased uncompensated care and
places an additional strain on hospitals and urgent care
facilities across the state. She concluded by noting that prior
to the enhanced premium tax credits, some people in Alaska had
been able to pay for insurance but over the years given
insurance price increases, the same households can no longer
afford insurance without assistance.
3:58:01 PM
REPRESENTATIVE SADDLER asked Ms. Teague whether she had an
insight regarding a solution to the rising costs of health
insurance.
MR. TEAGUE responded that she did not have any "solid"
solutions. She said that extending the tax credits would have
at least bought some time regarding finding an alternative. She
said that supporting health insurance availability for small
businesses was important and if access were easier, there may be
less of a need for tax credits in the first place.
3:59:07 PM
LAURA BUTCHER, Owner, C&L Creative, remarked that she is a small
business owner who owns a business with her husband that is
involved in marketing and video production. She noted that in
2025 she was paying $1,400 a month in insurance premiums to
cover all four members in her household. Then, rates jumped to
$4,250. She said that this was $51,000 in just premiums and the
three-fold increase in premium costs was shocking. She said
that if the family opted for the cheapest bronze plan, costs
would still have been $39,000 a year with a $15,000 deductible.
She said that this would be $56,000 in out-of-pocket costs
before insurance would make any meaningful contributions to
healthcare costs.
MS. BUTCHER said that her family did the math and they simply
could not afford health insurance and were currently uninsured.
She said that she is not ignorant of the fact that someone
cannot prepare for the worst and last year the family
experienced a medical emergency. She was thankful that the
household had insurance for previous medical emergencies, as the
household would have been bankrupt without it.
MS. BUTCHER said that some follow-up tests with a provider in
Anchorage cost around $1,000 without insurance. Her teenage
daughter's well-child checkup cost the family several hundred
dollars. She said that the well-child checkup was a routine,
preventative checkup and was still expensive. She reiterated
that the household still would not have met the $15,000
deductible for either of these incidents.
MS. BUTCHER asked how many Alaskans could easily afford $38,000
to $51,000 a year to pay for health insurance premiums; this was
not even with reference to the high cost of a deductible as
well. She asked about alternatives and noted that she was 51
and her husband was 54 and many health sharing programs are
expensive at their age. She said that they were also difficult
to be accepted into and finding providers was challenging.
MS. BUTCHER said that she loves Alaska but for the first time,
her family is considering moving out of state to pursue more
affordable healthcare options. She said the small businesses
are in the heart of Alaska and unfortunately healthcare costs
were making it impossible for people to call Alaska home.
4:03:31 PM
CO-CHAIR FIELDS noted that when meeting with U.S. Senator Dan
Sullivan and U.S. Senator Lisa Murkowski, they were urged to
include the extension of premium tax credits in the budget
reconciliation. However, the extension did not happen. He
offered an apology to the detrimental impact the expirations
have had on Ms. Butcher's family.
4:04:09 PM
MARK ROBOKOFF, Owner, AK Bark, noted that he was a small
business owner in Anchorage. He said that he submits his
testimony not for any bill in the legislature, but a "desperate
plea" given his financial situation. He said that small
businesses like his are often referred to with anatomical
metaphors; the "life blood" of the community and "the backbone"
of the economy. He noted small business importance to both the
City of Anchorage and Alaska as a whole. He said that citizens
and politicians are universally supportive of small businesses
and no politician was ever elected that wanted more conglomerate
businesses that funnel money to the "Lower-48" states.
MR. ROBOKOFF said that AK Bark offers retail pet supplies. He
said that not only is the business locally owned, but it
features and promotes over 30 supplies from other small local
businesses. He said that the store only procures supplies from
the Lower-48 when local options are not available. He said the
most profitable category of items is pet treats and the store
exclusively offers products only from Alaska.
MR. ROBOKOFF said that there are challenges to starting a small
business. He talked about finances required to start the
business and that according to the U.S. Bureau of Labor
Statistics approximately half of small businesses do not last
five years after opening.
MR. ROBOKOFF said that prior to the COVID-19 pandemic in 2020,
his earnings were low enough to allow for the purchase of health
insurance through the Affordable Care Act at a reasonable rate.
As his store gained traction and earnings went up, the ACA
subsidies helped keep health insurance premiums manageable. But
they were still two to three times more expensive than their
counterparts working in the lower-48. He accepted that this was
one cost of working in a "beautiful and rugged" state.
MR. ROBOKOFF noted that his wife is employed by another
Anchorage small business and does not enjoy subsidized
healthcare from the employer. He said that their combined
healthcare insurance premium in 2025 was $953. On January 1,
2026, the new premium was $2,886 which was triple the cost of
the previous year; a nearly $2,000 increase for the same level
of coverage.
MR. ROBOKOFF said that in 2025 his small business was "hitting
its stride." Revenue was up around 25 percent from the previous
year, and it was time to consider expanding. He said that
residents of various Alaska communities asked for storefronts to
be opened in their respective communities. He said that the
logical next move was to expand their business and footprint.
He said that all these plans have now been shelved; the funds
that would have been used for expanding the business are now
used to pay for his family's insurance premiums. He said that
this increase of healthcare premiums targets small business
owners, and the expiration of the subsidies seems no different
than a tax increase focused on hitting small retailers. He said
to imagine a bill that levies a tax specifically on small
businesses and said nobody would support it. He said that his
accountant, his wife's employer, and most of his local suppliers
find themselves in the same catastrophic predicament. He said
many of these suppliers have been forced to shut down. He said
that anyone considering starting a small business may consider
shelving that plan. He said that this bombshell change has and
will continue to change the very makeup of Alaska communities.
More small businesses will flounder and fail to the benefit of
outside mega corporations; more earnings in Alaska will leave
the state. He said that some small business owners will drop
their coverage to stay in business. As coverage drops, more
care will be covered by urgent care, more care will be
uncompensated, and this will drive up the cost of care for all
Alaskans. He said that health coverage is too important to be
dropped and asked for support for businesses in his same shoes.
He said that help is required to address healthcare costs for
small businesses.
4:10:21 PM
REPRESENTATIVE COULOMBE thanked Mr. Robokoff for his testimony
and asked what exactly he would like to see the legislature do
to address the situation.
MR. ROBOKOFF responded that he was not addressing any proposal
or bill in the legislature. He said that he wanted the
committee to understand the situation he is in and how it
affects the local and statewide economy. He asked for any
innovative approach that might address the situation.
4:11:26 PM
JANIS FLEISCHMAN, Owner, Fire Island Rustic Bakeshop, said that
she has lost a lot of bakers that the business trained because
they moved to private larger businesses to have health
insurance. She said that Fire Island Rustic Bakeshop had to
inform many of their employees that they would no longer be able
to receive healthcare coverage. She said that another challenge
has been Ballot Measure 1 which states that to use sick leave, a
doctor's note needs to be provided after three days. She said
almost none of their employees have a private physician which
forces them to visit urgent care just to justify the use of sick
leave. She said that this was not fair and it is costly to many
of her 75 employees.
MS. FLEISCHMAN said that the business has decided to insure for
2026. She said that the business started with Premera on
January 1, 2026. She said that the rates were approximately
$3,200 a year per employee. She said that many of the young
employees who were urged in the past to be on the exchange made
the decision not to carry the business coverage due to the cost.
She said this demonstrates how tight their budgets were. She
said that the business ended up insuring 18 eligible employees
and several employees opted to work less than 32 hours per week
to continue access to the healthcare insurance exchange.
MS. FLEISCHMAN said that there is a current cost to the business
of $13,500 a month to insure the employees. She noted that it
is a good policy, but it equates to $162,000 a year in costs for
a small business. She said that Fire Island Rustic Bakery has
been successful and a contributor to the community but has no
idea how the business will afford the insurance. She raised
concerns that the "tremendous cost" could raise the price of
goods. Furthermore, the plan did not accomplish what she hoped,
which was to ensure coverage for all their employees. She said
the business loves their employees and if something catastrophic
happens then the business would likely reach into their own
pocket to help. She said that this would not be adequate since
the cost would likely be hundreds of thousands of dollars.
4:15:19 PM
REPRESENTATIVE CARRICK asked Ms. Carpenter about slide 5 of the
presentation and what information could be deduced from the
chart regarding the rate changes.
MS. CARPENTER responded that she wants to make sure that people
understand the rate summary. She said the division was very
pleased to have an average reduction. She said that the average
reduction was a negative 2.2 percent for 2026 rates. However,
this was after three years of rate increases that averaged
around 15 percent each year. She said that in those years that
rate increases occurred, the enhanced premium tax credits were
available to support consumers.
REPRESENTATIVE CARRICK asked whether it was fair to say that
even with rate decreases, the premiums would still be relatively
unaffordable for small businesses purchasing on the open market
and the failure to extend the enhanced credits made them even
more unaffordable. She said that she was trying to get a sense
of how dramatically across the board were rate increases.
MS. CARPENTER responded that this would depend on several
factors; it depends on whether businesses were getting their
health insurance on the individual exchange where enhanced
premium tax credits exist. She said that one testifier
purchased insurance on the small group market where no credits
were available for "insulation." It also depends on the income
level for the small business. She reiterated that income and
insurance plans are factors for consideration.
4:19:08 PM
REPRESENTATIVE COULOMBE told Ms. Carpenter that she was on the
Division of Insurance website, and it says that the division
fulfills its mission statement by "protecting consumers,
promoting competitive insurance markets, and ensuring the
financial stability of insurance." She said that she does not
think that any of these things are happening. She said that the
division is working with insurance companies and noted concerns
about consumer protection. She asked what was being done to
keep insurance rates low, and it was clear that this is an
"outrageous situation." She said that the more the government
gets involved, the bigger the mess. She said that the
businesses were the tip of the iceberg. She said that she took
her elderly mom to primary care for an emergency; she had
private insurance and Medicare, and the clinical institution
would not take her. She said that the healthcare system is
currently outrageous. She said that the Division of Insurance
is the gatekeeper and fights for fair rates. She said that
every insurance premium she has used has "skyrocketed." She
appreciated the testimonies, but this was not something that she
did not know and she hears about these problems frequently from
constituents. She asked what the division was doing to mitigate
these things.
MS. CARPENTER responded that Representative Coulombe's
frustration is noted and shared by many. She said that when
looking at health insurance, it is incredibly fragmented. She
said her first slide showed this challenge. She said that the
Division of Insurance has only 15 percent of the market. The
division needs to review rate submissions from companies, and
the division needs to ensure that they are following all the
rules set by the Federal Government and ACA. She said that the
division reviews the proposed rates to ensure they are
actuarially sound. She said that MODA Health left the market
because financially they were not okay since the rates were too
low and the reason that the Division of Insurance went after the
1332 waiver was because the state was at risk of Premera leaving
the Alaska market. She said that insurers are businesses. She
said that the division did not allow a large contingency for
profit given the rates that get filed with the division. She
said that it was low, around 1 to 3 percent. Additionally, the
division was also looking to ensure that financials were sound,
and insurers did not face bankruptcy if premiums were not
filled. She said that the Division of Insurance market was made
up of people paying out of their own pocket.
MS. CARPENTER noted that Mr. Kosin had mentioned cost shifting
and when federal payers are too low it can be difficult to get
Medicare access. She said that some clinical institutions don't
accept Medicare since they cannot break even. She said that
often when Medicare costs shift, they shift onto the private
market. She said that the division is looking at multiple areas
to ensure that healthcare access can be improved and
unfortunately there is no "easy button." She said that rates
need to be set to accommodate multiple factors.
REPRESENTATIVE COULOMBE asked Ms. Carpenter whether she knew who
financially benefits from the tax credits and subsidies.
MS. CARPENTER responded that who benefits is likely two-part.
The individuals who are in the individual market qualify for the
tax credits.
REPRESENTATIVE COULOMBE asked whether Ms. Carpenter knew who
receives the money.
MS. CARPENTER said that it would come to the insurers; the
Federal Government would contribute money to the insurers.
REPRESENTATIVE COULOMBE said yes, the premiums would go to the
insurance companies. She understands the balance, but it is a
hard sell for her to think that the insurers are "barely making
a profit in Alaska." She said that she has a tough time hearing
this and Alaska is on its way to being an uninsured state. She
raised concerns about affordability in terms of both the state
and "regular people." She said that insurance companies are the
ones benefiting, whether medical, home, or auto. She said her
home insurance went up 80 percent, and the Division of Insurance
approved the rate increase. She offered her understanding that
the Division of Insurance needs to approve premiums for all
insurance rates, and if the mission is truly consumer
protection, then there should be some support mechanisms going
into place. She said that there is serious concern regarding
people leaving the state due to health insurance costs. She
said that she appreciates the work the Division of Insurance
does, but she is frustrated that year after year it is the same
problem and people are priced out of the market.
4:27:18 PM
MR. KOSIN said that he does not work for the Division of
Insurance and noted that he agreed with Representative
Coulombe's sentiment. He said that it seems like a lot of
finger pointing. He referred to a previous testifier's
statement about her daughter needing a wellness exam which cost
hundreds of dollars. He said that looking at the cost structure
in the Medicaid program, Medicare, and private insurance, there
is usually a ratio, such as 80/20 used in calculations. He
emphasized that 20 percent of the population drives 80 percent
of the cost, and he questioned why the focus was not on the 20
percent. He said that 20 percent was driving the cost up due to
chronic conditions and co-morbidities. He said that their care
has not been managed well enough from the beginning. He said
that if the testifier did not take her daughter to her wellness
exam, it would perpetuate this problem. He said that insurance
and insurers' math was hard to accept as well. He noted that
the budget has been flat for years but reiterated that if 20 or
even 10 percent of the population is driving the cost, there
needs to be better use of care management to prevent these cost
explosions.
4:29:24 PM
REPRESENTATIVE SADDLER said that he appreciates the passion and
frustration shared by Representative Coulombe. He said that
there is a tremendous amount of despair and frustration that has
been heard. He said he keeps hearing about how health insurance
has become expensive and he said that only peripherally the
committee has touched on the fact that healthcare itself is
expensive. He reiterated Mr. Kosin's remarks that healthcare
costs are being driven up by supporting the sickest of the sick.
He said that slide 5 of Ms. Carpenter's presentation detailed
information regarding indirect healthcare costs, and he noted
that there were considerable increases in costs provided on the
slide. He said that there are a lot of big increases in costs
and not many decreases. He asked Ms. Carpenter why there were
huge increases in costs and what allowed Alaska to receive the
decreases in rates.
MS. CARPENTER responded that this is a great question and noted
that the division looks at rates every year when they are filed.
She said that the division combs through the factors that play
into it. She noted that unfortunately Alaska has a sick
population which means that there is a sicker risk pool with
higher costs and claims. She said this would produce higher
insurance rates. She said that after several years this is what
has been seen. She said that after 2022, 2023, and 2024 there
were many who delayed care and consequently there were high
claims. She reiterated that the division looks at rates every
year and tries to ensure that rate information from the
companies was justifiable.
MS. CARPENTER noted that one factor where the division tried to
help reduce the cost and continuing rate increases was the
repeal of the eightieth percentile regulation which did have
some downward pressure on the rates. She said that rates were
the result of several factors, but things are complicated and
the ACA made things even more complicated. She said that one
good thing about the ACA was that pre-existing conditions were
covered and this was one of the most popular things. However,
this means that people with high-cost conditions are being
insured and it leads to increased healthcare costs. She
reiterated that health policy is not simple.
MS. CARPENTER pivoted to the Rural Healthcare Transformation
Program and noted that the division hoped that it could help
transform the system and allow for a positive future.
REPRESENTATIVE SADDLER said that he hopes that some focus can be
on reducing the cost of healthcare itself rather than putting
"Band-aids" on and supplementing the insurance companies.
4:33:33 PM
CO-CHAIR FIELDS agreed with Representative Saddler that the goal
should be driving down healthcare costs.
4:33:36 PM
REPRESENTATIVE COULOMBE asked whether the State of Alaska taxes
insurance.
MS. CARPENTER responded that there is an insurance premium tax
on all insurance companies and the policies that they file.
REPRESENTATIVE COULOMBE said that it would be policies that the
state pays for and asked whether there is an additional tax to
it.
MS. CARPENTER responded that this has been in the insurance code
for many years and the standard rate is 2.7 percent.
REPRESENTATIVE COULOMBE said to her understanding there is about
$80 million in revenue that comes from this tax and asked
whether she had any idea how much of it is from health insurance
policy.
MS. CARPENTER responded that she could follow up with this
information.
REPRESENTATIVE COULOMBE noted that this did not currently seem
like a good place to tax people and it may warrant review. She
did not think that this is an area that people should be
charged.
MS. CARPENTER noted that the division is not funded from the
tax, the earnings are passed onto the Department of Revenue and
appropriated by the legislature. She noted that this
information was available in the revenue sourcebook and one
place that is line itemed is the tax on workers' compensation
insurance. She reiterated that the division was not funded by
tax money.
4:35:46 PM
REPRESENTATIVE SADDLER said that if there was a 2.7 percent tax
that insurance companies pay on the premiums then this would
become part of their base rate. He asked whether taxes tumble
downstairs to the people purchasing insurance.
MS. CARPENTER responded that like all taxes it needs to be paid
somehow. It would only apply to those under the purview of the
Division of Insurance and not the remaining 85 percent of policy
holders.
4:36:30 PM
CO-CHAIR FIELDS announced that this concluded the presentation
regarding the rising cost of healthcare in Alaska. He thanked
the testifiers and committee for their insights.
HB 243-BARBER, HAIRDRESSER, ESTHETICS LICENSING
4:36:48 PM
CO-CHAIR FIELDS announced that the final order of business would
be HOUSE BILL NO. 243, "An Act relating to the powers and duties
of the Board of Barbers and Hairdressers and the Department of
Commerce, Community, and Economic Development; and providing for
an effective date."
4:37:11 PM
REPRESENTATIVE ASHLEY CARRICK, Alaska State Legislature, as
prime sponsor, presented HB 243. She said that the proposed
legislation would simply codify existing practice with the Board
of Barbers and Hairdressers. She explained that currently the
board has seven members appointed by the governor and confirmed
by the legislature for four-year terms. She noted that like
some other boards and commissions, these are voluntary
positions. She said that the board is composed of one licensed
barber, two licensed hairdressers or estheticians, licensed body
piercer and tattoo artist, a licensed manicurist, one person
licensed for something else regulated by the board, and lastly
one board member from the public. She said that board members
are often working in these professions as small businesses
themselves and volunteer to be on the board.
REPRESENTATIVE CARRICK noted that the purpose of HB 243 is to
essentially prevent the possibility for licensure bottlenecking
in the state which will ensure that businesses can continue to
provide operations without hinderance. She explained that it is
currently standard practice with the board to delegate its
licensing authority to the Division of Corporations, Businesses,
and Professional Licensing. She reiterated that the proposed
legislation would "codify" this existing practice.
REPRESENTATIVE CARRICK said that the sectional analysis just
adds language that conforms to existing practice. The sectional
analysis [included in committee file], read as follows [original
punctuation provided]:
Section 1: Amends AS 08.13.030(b).
Specifies the authority of the Board of Barbers and
Hairdressers to delegate licensing authority to
the Department of Commerce, Community, and Economic
Development.
Section 2: Amends AS 08.13.030(c).
Specifies that the Board of Barbers and Hairdressers
may refuse to issue licenses or permits.
Section 3: Amends AS 08.13.110(d)
Conforming language relating to the changes made in
Section 1. Specifies that the Board may
authorize the issuance of licenses or permits for
schools of manicuring.
Section 4: Immediate effective date.
REPRESENTATIVE CARRICK noted that this would clarify that the
board would be able not only to issue licenses and permits but
also refuse licenses and permits. She said that this would be
added to the proposed statute to ensure that this responsibility
is part of the board's purview.
4:39:43 PM
KEVIN MCKINLEY, Chair, Board of Barbers and Hairdressers, gave
invited testimony in support of HB 243. He explained that in
addition to his role as chair of the board, he is also a
business owner of a tattoo and body piercing shop with four
locations in Alaska. He said that he has been operating his
business for 35 years.
MR. MCKINLEY said that previously the board reviewed
applications and it was later determined that there needed to be
a more efficient way of approaching applications. He said that
the Department of Law suggested that the board create a
checklist and put it into regulation, then the Division of
Corporations, Business and Professional Licensing could use it
while reviewing applications.
MR. MCKINLEY explained that recently the Department of Law came
to the board and said that it suggested that either applications
need to be reviewed by the board itself or there needs to be a
change in Alaska Statute. He noted that the board unanimously
voted to have the statute changed and felt that it would make
application processing more efficient. He said that if the bill
does not pass, then the application backlog would be
substantial. He noted that in 2025, there were 971 applications
and this would be difficult for a board of seven volunteers to
process. He reiterated that this statute would codify a current
working process with the intention that it can reduce
bottlenecks in the industry.
4:42:08 PM
REPRESENTATIVE SADDLER told Mr. McKinley that the desire seems
intended to sanctify an existing practice and asked whether the
practice creates any clouds on the licenses of those who were
issued licenses before the proposed legislation might take
effect.
MR. MCKINLEY responded that he was not sure that he understood
the question.
REPRESENTATIVE SADDLER asked whether any questions could be
raised about license validity once legislation goes into effect.
MR. MCKINLEY responded that this may be a question best
addressed by Sylvan Robb.
4:43:34 PM
SYLVAN ROBB, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community, and
Economic Development responded that she did not think that any
current licenses were in jeopardy given the proposed
legislation.
4:44:08 PM
REPRESENTATIVE COULOMBE said that her understanding is that the
licensing process would go through the division as opposed to
the board and asked whether this was a correct assumption.
REPRESENTATIVE CARRICK responded that it still preserves the
ability of the board to conduct licensing functions, but the
legislation permits the board to defer this responsibility to
the division.
REPRESENTATIVE COULOMBE asked whether the division would be
doing the licensing if the Board of Barbers and Hairdressers
were disbanded.
REPRESENTATIVE CARRICK responded that she was glad this question
was asked, and the Board of Barbers and Hairdressers did more
than just issue licenses. She noted that having licensed
professional seats on the board is important to navigate the
profession.
4:45:49 PM
CO-CHAIR FIELDS announced that HB 243 was held over.
4:46:10 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:45 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 243 Ver A.pdf |
HL&C 1/26/2026 3:15:00 PM |
HB 243 |
| HB 243 Sponsor Statement.pdf |
HL&C 1/26/2026 3:15:00 PM |
HB 243 |
| HB 243 Backup BBHD Legislative Sponsorship Request.pdf |
HL&C 1/26/2026 3:15:00 PM |
HB 243 |
| HB243-DCCED-CBPL-01-23-26.pdf |
HL&C 1/26/2026 3:15:00 PM |
HB 243 |
| HB 243 Presentation.pdf |
HL&C 1/26/2026 3:15:00 PM |
HB 243 |
| HB 243 Sectional Analysis Ver. A.pdf |
HL&C 1/26/2026 3:15:00 PM |
HB 243 |
| DOI Presentation to HL&C 1.26.26.pdf |
HL&C 1/26/2026 3:15:00 PM |
Presentation: Rising Cost of Health Care |
| DOI ACA Subsidies White Paper 1.22.26.pdf |
HL&C 1/26/2026 3:15:00 PM |
Presentation: Rising Cost of Healthcare |